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Forecasting the Incremental Value to Society Created by a Class of New Prescription Drugs: A Proposed Methodology and Its Application to Treating Chronic Hepatitis C in India


  • V. Srinivasan

    (Stanford University)

  • David E. Bloom

    (Harvard University)

  • Alex Khoury

    (Harvard University)


Background For low- and middle-income countries, the forecasted incremental value to society created by a class of new prescription drugs would be a useful criterion to prioritize the licensing, subsidization, and provision of new drugs. Objectives We provide a methodology to forecast the value of a new class of drugs, defined as the incremental value obtained in the scenario in which the new class of drugs is available along with existing drugs compared with the scenario of existing drugs only. We forecasted the value created by direct-acting antiviral drugs to treat chronic hepatitis C in India. Method We conducted a physician survey together with an aggregate multinomial logit model to forecast for each patient type the fraction of physicians who would prescribe the new drug under different scenarios. Value was determined by the monetary equivalent of increased life expectancy, reduced disability, and decreased future infection of others, minus drug cost, all treatment-related costs, and the cost of side effects. Results We forecasted that the introduction of direct-acting antiviral drugs is likely to create USD11.5 billion of value in India over a 5-year period, based on a ‘realistic’ assumption about the growth rate of India’s per capita GDP. Under ‘pessimistic’ and ‘optimistic’ assumptions about the growth rate, the value changes to USD6.5 and 22.5 billion, respectively. Conclusions There is major value likely to be created by the new direct-acting antiviral drugs in treating hepatitis C in India; this is consistent with the Indian Government’s decision to provide the drugs free of cost.

Suggested Citation

  • V. Srinivasan & David E. Bloom & Alex Khoury, 2022. "Forecasting the Incremental Value to Society Created by a Class of New Prescription Drugs: A Proposed Methodology and Its Application to Treating Chronic Hepatitis C in India," Applied Health Economics and Health Policy, Springer, vol. 20(3), pages 371-381, May.
  • Handle: RePEc:spr:aphecp:v:20:y:2022:i:3:d:10.1007_s40258-022-00725-0
    DOI: 10.1007/s40258-022-00725-0

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    References listed on IDEAS

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